DoD awards $1.78B for UH-1Y/AH-1Z helicopter long-lead parts, with Bell Textron Inc. as sole source

Contract Overview

Contract Amount: $1,782,171,429 ($1.8B)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2013-04-01

End Date: 2019-10-31

Contract Duration: 2,404 days

Daily Burn Rate: $741.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UH-1Y AND AH-1Z LONG LEAD PARTS LIST AAC

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76118

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $1.78 billion to BELL TEXTRON INC for work described as: UH-1Y AND AH-1Z LONG LEAD PARTS LIST AAC Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Long lead time parts indicate a focus on sustainment and future production of critical rotary-wing aircraft. 3. The contract's duration and value suggest a significant commitment to the UH-1Y and AH-1Z platforms. 4. Lack of competition may limit opportunities for innovation and cost reduction from alternative suppliers. 5. Performance risk is moderate given the established nature of the aircraft platforms and sole-source provider. 6. Geographic concentration in Texas for manufacturing could present supply chain vulnerabilities.

Value Assessment

Rating: questionable

The total award of $1.78 billion for long-lead parts for the UH-1Y and AH-1Z helicopters is substantial. Without competitive bidding, it is difficult to benchmark the value for money. The firm-fixed-price structure offers some cost certainty to the government, but the absence of competition means the government may not be achieving the lowest possible price. This contract's value should be compared against historical spending for similar long-lead parts procurements for these aircraft types to assess if the pricing is within an expected range.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Bell Textron Inc. The justification for sole-sourcing is not provided in the data, but it typically implies that only one responsible source is capable of making the supply. This lack of competition means that the government did not benefit from a bidding process, which could have led to lower prices and more innovative solutions from multiple vendors.

Taxpayer Impact: Taxpayers are likely paying a premium due to the absence of competitive pressure. Without competing the requirement, there is less incentive for the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the U.S. Marine Corps, who operate the UH-1Y Venom and AH-1Z Viper attack helicopters. This contract ensures the continued availability of critical components necessary for the sustainment and potential future production of these essential rotary-wing aircraft. The contract has implications for the aerospace manufacturing workforce, particularly in Texas, where Bell Textron Inc. has significant operations. The availability of these helicopters is crucial for various military operations, including troop transport, close air support, and reconnaissance missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long lead times for parts could indicate potential future production delays or supply chain risks.
Concentration of manufacturing in a single state (Texas) could pose geographic supply chain risks.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarding long-lead parts ensures continued readiness and sustainment of critical helicopter platforms.
Bell Textron Inc. is an established manufacturer with a track record on these specific aircraft.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically supporting the production and sustainment of military helicopters. The aerospace and defense industry is characterized by high barriers to entry, significant R&D investment, and often long-term government contracts. Spending on long-lead parts is a critical component of maintaining the readiness and operational capability of military aviation fleets. Comparable spending benchmarks would involve analyzing procurements for similar helicopter components or aircraft sustainment contracts within the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely limited unless Bell Textron Inc. actively engages them for subcontracting opportunities. Further investigation into Bell Textron's subcontracting practices would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

The Department of Defense and the Defense Contract Management Agency (DCMA) are responsible for oversight of this contract. As a definitive contract, it is subject to standard contractual oversight, including monitoring performance, delivery schedules, and payment. Transparency is facilitated through contract databases like FPDS, but the specific details of the sole-source justification and pricing negotiations may not be fully public. Inspector General reviews could be initiated if performance issues or potential fraud are identified.

Related Government Programs

UH-1Y Helicopter Program
AH-1Z Viper Helicopter Program
Department of Defense Aircraft Procurement
Rotary-Wing Aircraft Sustainment
Long Lead Time Material Procurement

Risk Flags

Sole-source justification requires scrutiny.
Potential for cost overruns due to lack of competition.
Supply chain concentration risk.
Long lead times may impact program schedules if issues arise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.78 billion to BELL TEXTRON INC. UH-1Y AND AH-1Z LONG LEAD PARTS LIST AAC

Who is the contractor on this award?

The obligated recipient is BELL TEXTRON INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $1.78 billion.

What is the period of performance?

Start: 2013-04-01. End: 2019-10-31.

What is Bell Textron Inc.'s track record with the UH-1Y and AH-1Z programs?

Bell Textron Inc. is the original equipment manufacturer (OEM) for both the UH-1Y Venom and AH-1Z Viper helicopters, having developed and produced these aircraft for the U.S. Marine Corps. Their track record with these specific platforms is extensive, encompassing design, development, production, and sustainment activities over many years. They possess deep institutional knowledge of the aircraft's systems, performance characteristics, and manufacturing processes. This long-standing relationship and specialized expertise are often key factors cited in sole-source justifications for critical components and sustainment efforts, as demonstrated by this significant award for long-lead parts.

How does the $1.78 billion value compare to historical spending on similar long-lead parts for these aircraft?

Direct comparison of this $1.78 billion award for long-lead parts to historical spending requires access to detailed historical procurement data for the UH-1Y and AH-1Z programs, specifically for long-lead items. Without such granular data, a precise benchmark is difficult. However, the sheer magnitude of the award suggests a substantial commitment to ensuring the future availability of these components. It is reasonable to infer that this figure reflects the cost of materials, specialized manufacturing processes, and the extended lead times inherent in producing complex aerospace components. A thorough analysis would involve examining annual spending trends for these parts over the life cycle of the aircraft programs.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude are related to cost and potential lack of innovation. Without competition, Bell Textron Inc. faces less pressure to minimize costs, potentially leading to higher prices for the government than if multiple bidders were involved. There is also a reduced incentive to explore more efficient manufacturing techniques or alternative material sourcing. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if Bell Textron encounters production issues, it could significantly impact the availability of critical helicopter parts. The government's negotiation leverage is also diminished in a sole-source scenario.

How effective is the firm-fixed-price contract type in managing costs for long-lead parts?

The firm-fixed-price (FFP) contract type is generally effective in managing costs for long-lead parts by shifting the cost risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This provides the government with cost certainty, as the total expenditure is known upfront. For long-lead items where material and manufacturing costs can be reasonably estimated, FFP is a suitable choice. However, the effectiveness in achieving the *lowest possible* price is diminished in a sole-source context, as the 'firm' price is determined through negotiation rather than competitive bidding.

What are the potential workforce implications of this contract, particularly in Texas?

This contract is likely to have significant positive implications for the aerospace manufacturing workforce, particularly in Texas, where Bell Textron Inc. has major facilities. The production of long-lead parts requires skilled labor, including machinists, engineers, technicians, and assembly personnel. The substantial value and duration of this award suggest sustained employment opportunities and potential job growth within Bell Textron and its associated supply chain in the region. It reinforces the importance of the Texas aerospace cluster and its contribution to national defense manufacturing capabilities.

Are there any specific performance metrics or oversight mechanisms detailed for this contract?

The provided data indicates the contract type is 'DEFINITIVE CONTRACT' and the payment terms are 'FIRM FIXED PRICE'. While this establishes the overall framework, it does not detail specific performance metrics or granular oversight mechanisms beyond standard contractual compliance. Definitive contracts typically include clauses for delivery schedules, quality standards, and acceptance criteria. Oversight would be managed by the contracting officer and potentially the Defense Contract Management Agency (DCMA), focusing on ensuring timely delivery of conforming parts. However, the specific Key Performance Indicators (KPIs) or detailed reporting requirements are not itemized in this summary data.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

Address: 3255 BELL FLIGHT BLVD, FORT WORTH, TX, 76118

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,860,604,141

Exercised Options: $1,860,604,141

Current Obligation: $1,782,171,429

Subaward Activity

Number of Subawards: 72

Total Subaward Amount: $76,257,868

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline